Oct 2008 Financial News

JMMB Media Advisory

Oct 16, 2008

The following is a media advisory received from Jamaica Money Market Brokers (JMMB) addressing concerns regarding the Jamaican financial sector arising from the US Financial Crisis.

JMMB - THE FACTS
Concerns regarding the Jamaican financial sector arising from US Financial Crisis

RUMOURS ABOUT JAMAICAN FINANCE HOUSES UNFOUNDED – IT IS BUSINESS AS USUAL

1. As a result of the instability in the US Financial Markets, rumors are being circulated about how that is impacting investment brokerage houses and banks in Jamaica.

2. All Investment brokerage houses are regulated by the Financial Services Commission (FSC) headed by Mr. George Roper. This means that the FSC provides guidelines and continuously monitors the companies to ensure that client investments are properly managed, and that the investment brokerage houses conform to industry guidelines. The FSC is empowered to have full information on each investment brokerage house. Banks are regulated by the Bank of Jamaica, which ensures that deposits are also properly managed.

3. George Roper, Acting Executive Director of the FSC, has clearly stated that the US financial crisis will have minimal impact on the investment brokerage houses. In an article in The Sunday Herald September 28th, 2008, Ralston Hyman reported that “Roper pointed out that the institutions under his stewardship are well capitalized and are therefore in a position to deal with any minimal exposure to the US meltdown.”

4. As such, we encourage clients to call their investment houses just as they are calling us, to get the facts and to act on the basis of facts not rumours. Spreading and acting on rumours creates unnecessary anxiety in the industry.

5. We do not encourage our clients to move investments from other houses to JMMB on the basis of rumours. We believe that would be unethical. We believe the Jamaican industry and regulations are sound, having had the benefit of lessons learnt from the 1990’s with the local banking sector crisis.

INVESTMENT HOUSES SELL SAFE INVESTMENTS TO WIDER PUBLIC

6. The FSC requires and ensures, through regular monitoring that the wider investing public is only sold safe securities under repurchase agreements.

7. At JMMB we sell GOJ Securities to the wider investing public through our Sure Investor and our Save Smart accounts.

8. These GOJ securities are 100% guaranteed by the GOJ as opposed to bank and building society deposits which are guaranteed by the JDIC for up to JA$600,000.00.

9. An Investment Brokerage buys and sells securities as a part of its normal operations.

10. When a client comes to get money from their investments, the house simply buys back some of the GOJ securities held by the client, and then sells those GOJ securities to other clients, other investment brokerage houses, banks or the Bank of Jamaica.

11. GOJ securities are the most liquid instruments available and hence they are easily converted to cash.

12. Because the Investment Brokerage houses sell the clients highly liquid securities, their clients have no reason to be concerned about not being able to get money from their investments.

JMMB’S DIVERSIFIED BUSINESS MODEL: OWN PORTFOLIO IS ONE PART OF THE WHOLE

13. JMMB invests its profits in its own investment portfolio. Approximately 3% of our own portfolio was invested in Lehman Brothers. It is important to note that in keeping with our diversification strategy our own portfolio is invested across many different types of instruments and therefore our investment in Lehman is manageable.

14. In an article on Sunday September 28th, 2008, headlined US CRISIS LEAVES MINIMAL IMPACT ON JAMAICAN FINANCE HOUSES by Al Edwards, he acknowledged that “JMMB has been the most candid” about the impact on JMMB. He further quotes “George Roper, Acting Executive director of the FSC as saying:”JMMB has been very transparent and it has a very small exposure to Lehman Brothers, which is in fact manageable”. (Refer to article)

15. When there are major events, as have occurred recently in the international financial markets, there are many opportunities for investors to identify investments that can provide great value.

16. In the past, JMMB has successfully taken advantage of world financial market upheavals - in 1998 (Russian Crisis/Asian Contagion) and 2001 (9/11), and locally in 2003 (200% Increased Interest Rates overnight) - leading to very good overall returns on our own investments to the benefit of our shareholders.

JMMB’S DIVERSIFICATION STRATEGY ENSURES LONG TERM SUSTAINABLE GROWTH FOR CLIENTS & SHAREHOLDERS

17. Since inception, JMMB, a company of firsts, has pursued a diversified strategy: Regional Diversification and Business Line Diversification.
a. 1992 – JMMB establishes the first money market brokerage house in Jamaica, with the mission of developing the secondary debt market to make money market investments available to the wider saving population in Jamaica.

b. 1995 – JMMB diversifies its business model by establishing its own investment portfolio.

c. 2000 – JMMB, through a joint venture, establishes CMMB in Trinidad
i. By replicating our local operations in Trinidad, we played an integral role in developing the secondary debt market there.
ii. We now have a brokerage presence in Barbados and St. Lucia and soon we will also be in St. Vincent

d. 2002 – JMMB widens its suite of investment products to include equities and indexed funds, enabling clients to enjoy diversification in their portfolio.

e. 2003 – JMMB expands its business lines through its commitment to meeting clients’ needs with a full service insurance brokerage house (JMMBIB).

f. 2005 – Regional and Business line diversification continues with JMMB’s successful venture into Commercial and Merchant Banking in Trinidad with InterCommercial Bank Ltd. (IBL).

g. 2006 – JMMB begins to replicate its local operations in the Dominican Republican, which has huge potential as the DR economy three times the size of Jamaica, and is the largest economy in the Caribbean.

h. 2007 – JMMB continues to diversify its business model with its expanded loan offerings to retail, commercial and corporate clients.

i. 2008 - After 2 years of working with the DR regulators JMMB BDI is given the green light to develop the secondary debt market in the DR. Today, we have JMMB BDI America already profitable in first months of operations.

j. October 2008 – JMMB will bring a more complete service offering to companies through ‘Corporate Solutions’: cash management, commercial loans, corporate finance, insurance, investment management services and pensions.

k. October 2008 – Consistent with our desire to always meet and exceed our client needs, we will launch our Electronic Transaction Machine(ETM) dual currency services.


Source:
The Trinidad and Tobago Stock Exchange Limited
Thursday October 16, 2008